Now is the excellent time to purchase your dream home with Georgia’s low mortgage rates. With January out of the way, Georgia mortgage rates continue to defy predictions on Wall Street. However, what goes up must come down, and what does down must go back up including Georgia mortgage rates. Continue reading to learn more about prediction of the market and the factors that play into those predictions.
What are Georgia’s 30-Year Mortgage Rates?
Across the nation, 30-year Georgia mortgage rates have dropped to the lowest they have been in a year. Top tier borrowers will enjoy Georgia mortgage rates as low as 3.625% for a 30-year fixed rate. However, it’s important for borrowers to keep this in mind because many lenders are still closer to  the previous week’s rate of 3.81%. According to Freddie Mac’s weekly mortgage rate survey, conventional 30-year mortgage rates are averaging around 3.79%, which is .25% basis points below the rate at the same time in 2015. The effect of this decrease is a big deal to consumers. For example, if you could afford a $400,000 in December of last year, you could afford a house for $411,000 today.
What is In-the-Money Refinance Option?
It’s not just homebuyers that are benefiting from this mortgage rate decrease. Millions of homeowners across the nation are now realizing the dramatic effect of low interest rates on their ability to refinance. When this happens, homeowners are classified as “in the money.” For a homeowner’s house to be classified as “in the money,” their current mortgage rate has to be over 1.5% higher than today’s rate. At the same time, your loan must have a balance higher than $50,000 and have  more than 10 left. Even when someone has recently purchased their home, it’s always worth reviewing the mortgage to see if refinancing would result in lower payments or the ability to pay the mortgage off quicker. If there are closing costs, most lenders are willing to help out with those.
What are Georgia’s Mortgage Rates Predictions?
It’s vital that mortgage rates stay below 4%. However, it’s important to understand that mortgage rates will not stay low forever. Interest rates are subject o change when the market shifts and with changes in the economy. Mortgages are based on mortgage-backed securities (MBS), which have been relatively unstable. The actual price of mortgage-backed securities respond to several market conditions, such as the nation’s unemployment rate, the Federal Reserve, and even international conditions. As a result, most people predict Georgia’s mortgage rates will increase into the low fours and hold. On the other hand, most experts suggest mortgage rates will continue to decline. Determining the direction of mortgage rates are part psychology and part economy. Some of the most vital aspects to watch when trying to determine the direction of the mortgage industry are listed below.
How Does Inflation Affect Georgia Mortgage Rates?
Inflation rates are one of the most important factor influencing Georgia mortgage rates. When inflation increases, the Federal Reserve becomes significantly more inclined to bolster the Feds Funds Rate, which causes Georgia mortgage rates to spike. One of the top enemies of a low mortgage rates is inflation. Inflation literally devalues the U.S. dollar, which results in a devaluation of everything else listed in the U.S. dollar. However, inflation doesn’t have to actually increase to cause mortgage rates to increase. Even the thought or threat of inflation may cause mortgage rates to rise. Inflation rates have been beneath the Fed’s target of 2% and stable since 2012. If inflation rates get too low, then deflation occurs, which is commonly associated with falling rates. In 2009, the Federal Reserve started taking the initiative to circumvent deflation and to bolster the economy. Those efforts have worked.
How Does Employment Affect Georgia Mortgage Rates?
Since 2010, almost 13 million jobs have been added to the economy, which has caused the overall unemployment rate to decrease to 5%. Even with the introduction of new jobs, overall wages have not increased enough to suggest a full economy recovery. In any case, job growth is job growth, and all financial markets have been closely watching. Economic forces typically will cause the wages to increase, which leads to more and more consumer spending. As consumer spending increases, inflation will as well. While these things have yet to materialize, it’s almost impossible to avoid this potential outcome.
How Does the World Economy Affect Georgia Mortgage Rates?
In addition to inflation and employment rates, the U.S. mortgage rates are also affected what is going on in the world. The most general rule of thumb is U.S. mortgage rates will improve as the global economies slows down or weakens. This phenomenon is caused by a pattern of investing called “flight-to-quality” or safe-haven buying. “Flight-to-Quality” explains periods of political or economic uncertainty or when money flows from a riskier asset to a safer one. Instead of leaving their asset in the riskier vehicle, investors choose safer assets to make sure their principal investment stays intact. The safest investment in the world are U.S. mortgage bonds. Simply put, when war is inevitable; when a country’s future is uncertain; or when oil prices have a negative effect on jobs; the U.S. mortgage rates will fall. This is because in the face of economic uncertainty or turmoil, investors will ditch their riskier international investments and choose quality, which has traditionally been the U.S mortgage bonds.
In the end, some experts predict the Georgia mortgage rates will remain relatively low. However, California loan officer and creator of HomeLoanArtist.com, Brad Yermans, predicts mortgages will be in the 4.75% range by the end of the year. When it comes to predicting Georgia’s mortgage rates, no one really knows what will happen. However, by watching the market and paying attention to the previously mentioned indicators, you may be able to detect increases or decreases before they happen.
2 Point Highlight
Now is the excellent time to purchase your dream home with Georgia’s low mortgage rates. With January out of the way, Georgia mortgage rates continue to defy predictions on Wall Street.
